Japan Secondary Aluminium Alloy Makers Get 7 yen/kg Hike

Japanese secondary aluminium alloy makers agreed with the users including die casting makers to increase the ingot price by around 7 yen per kilogram for ADC12 grade for April shipment. The ingot makers sought more than 10 yen hike when aluminium scrap price was surging and Japanese secondary aluminium alloy ingot price stayed cheaper than Chinese products. However, they couldn’t realize the target under users’ resistance with uncertainty of aluminium market and slow domestic market before a week long holiday. The ingot makers will seek 15-20 yen hike for May shipment under the higher cost price when offshore primary ingot price renews record high. Secondary aluminium alloy demand maintains active for auto parts. Japanese demand is estimated to increase by 3.1% to record 1.809 tonnes in fiscal 2006 ending March 2007 from the previous year, after which increased by 4.8% to 1.755 tonnes in fiscal 2005 from fiscal 2004. The ingot makers continue full production under the strong demand.The users are reluctant to import secondary aluminium alloy ingot at higher price than domestic price when material costs continue surging. The users purchase secondary aluminium alloy ingot mainly from domestic ingot makers and domestic ingot supply becomes even tighter in Japan.On the other hand, users have showed some concession in price negotiation under the condition that primary aluminium price exceeded US$ 2,000 per tonne in January 2006 and continued surging. In addition Japanese auto parts export keeps brisk and parts makers need to secure enough secondary aluminium alloy ingot steadily.